FAQ
Does an Appraisal Report require an authentication?
What do the Letters at the End of the Appraiser’s Name Represent?
What is USPAP and Why is this IMPORTANT?
What Constitutes a “Qualified Appraiser”?
How Does an Appraiser estimate or Determine the Value of an Item?
Why are there Various “Types” of Values?
What Styles of Appraisals are There?
when will i need an appraisal?
What Types of Appraisals are there?
who needs an appraisal?
Insurance Appraisals: This appraisal will provide the necessary documentation to substantiate the existence, condition and replacement cost of your belongings. It is wise to have an update done every five to ten years or preceding a pending household move.
Resale Appraisals: This appraisal will provide the necessary fair market value documentation so all parties involved are knowledgeable about the personal property. Although Heritage Appraisals does not buy or sell items due to the conflict of interest, we can supply the client with a list of reputable auction houses, brokerage firms, consignment and estate dealers that would be best suited and have a strong background in such items to assist in the sale. From that point, the client can make their own determination as how to proceed and whom they choose to assist them.
Charitable Contribution/Donation Appraisals: This appraisal is suggested by the IRS to substantiate a tax deduction above $500; however, it is REQUIRED for anything above $5,000 that will be donated to a charitable organization/institution.
Pre-move Appraisals: Due to the limited level of protection for damage or loss provided by a moving company, this type of appraisal will provide an inventory of your high-value items as it can substantiate both the higher value and their existence. It will help you to acquire the additional necessary insurance.
Equitable Distribution Appraisals: This appraisal is used during divorce or estate settlements to facilitate a fair distribution of property.
Estate Appraisals: This appraisal is necessary for a taxable estate, litigation, and probate. It is necessary to properly document the property providing an appraisal that meets IRS and legal requirements.
Trust or Will Appraisals: This appraisal should be attached to the trust/will and a copy also given to the trust attorney who has knowledge of the property and knows who is to inherit which item(s).
What Types of Appraisals are There?
Museum, Corporate, University & Private Client Services
• Personal Records
• Insurance Coverage
• Damage Claims
• Resale Function
• Charitable Contribution/Donation
• Tax Deductible Gifts
• Divorce Settlements
• Equitable Distribution & Dissolution
• Estate, Will & Trust Planning
• Estate Evaluations
• Estate Probate Tax
• Litigation Support
• Investment Evaluations
• Appraisal Review
• Consultation Services
when will i need an appraisal?
Restricted-Use Appraisal Report: Provided when the intended users do NOT include parties other than the client.
Appraisal Report: Provided when intended users include MULTIPLE parties in addition to the client, such as the Federal Government, Estate functions, etc.
WHAT STYLES OF APPRAISALS ARE THERE?
The “type” of value utilized in your appraisal report will be determined by the appraiser. The type of value to be cited is established based on the type of report requested, such as insurance coverage, estate, will, trust, equitable distribution, charitable contribution, resale, divorce, bankruptcy or just general knowledge purposes.
The appraiser will discuss during the first consultation what the purpose of the appraisal report will be and then educate you on the various types of values and what type of value fits your needs best.
WHY ARE THERE VARIOUS “TYPES” OF VALUES?
Appraisers estimate/determine their value conclusions based on many aspects. Primarily, a great number of market sources are assessed and analyzed by the appraiser for each item in both primary and secondary markets (based on the type of value/report). The appraiser will study each comparable for similarities in likeness, subject, size, condition, quality and market area. The comparables are typically cited within the report for the client to review and understand how the appraiser derived at their conclusions and to understand the market as a whole.
HOW DOES AN APPRAISER ESTIMATE OR DETERMINE THE VALUE OF AN ITEM?
A qualified appraiser is an individual who:
• Has earned an appraisal designation from a recognized professional appraisal organization for demonstrated competency in valuing the type of property being appraised OR has met certain minimum education and experience requirements or completed college or professional level coursework relevant to the property being valued and must have at least 2 years of experience in the business of buying, selling or appraising such property
• Regularly prepares appraisals for which he or she is paid
• States they are qualified to make these type of appraisals
Excluded individuals include:
• The donor of the property, or the taxpayer who claims the deduction
• The donee (recipient) of the property
• A party to the transaction by which the donor acquired the property
• Usually, a party to the transaction will not qualify to sign the Certification of Appraiser section. However, a person who sold, exchanged or gave the property to the donor may sign the certification if the property is donated within two months of the date the donor acquired it and the property’s appraised value does not exceed its acquisition price
• Any person employed by, married to or related to any of the above-named persons, or anyone whose relationship to any of those involved in the donation would cause a reasonable person to question the independence of the appraiser. Part III (Section B) of IRS Form 8283 lists persons who cannot be qualified appraisers
• An appraiser who appraises regularly for any person listed above and who does not perform a majority of his or her appraisals made during his or her tax year for other persons
• Understands that an intentionally false overstatement of the value of the property may subject him or her to the penalty for aiding and abetting an understatement of tax liability. The donor may be liable for a penalty for overstating the value of donated property
WHAT CONSTITUTES A “QUALIFIED APPRAISER”?
USPAP - Uniform Standards of Professional Appraisal Practice
The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. It is essential that appraisers develop and communicate their analyses, opinions and conclusions to intended users of their services in a manner that is meaningful and not misleading.
The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services. The appraiser’s responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical obligations on those who serve in this capacity. USPAP reflects the current standards of the appraisal profession.
A well-constructed report can meet the requirements of being objective, complete, accurate and not misleading only if it reflects the uniqueness of each situation and presents arguments (either for or against a conclusion) in a well-written and convincing fashion.
Reports should include the following:
• Documentation of why the appraisal is being conducted (the intended use)
• What the appraiser is being asked to conclude (the objective)
• What conditions surround the appraisal that could affect the appraiser’s conclusions
• What approach to value/cost was used
• Complete descriptions
• Statements of condition
• Provenance (history of ownership), exhibitions and citations in literature
• Results of tests done for identification or authentication
• How value characteristics of the subject property compared with those of comparable properties
• What markets were explored and how were they analyzed
• Records of past sales of comparable property
• A reconciliation of data and a final value conclusion
WHAT IS USPAP AND WHY IS THIS IMPORTANT?
Qualified Appraisers are generally affiliated and trained with one or more recognized appraisal organizations and maintain a continued relationship with their organization of choice to stay up to date on the newest report writing standards and educational elements. These relationships are typically maintained for the entire career of the appraiser so they maintain the most up to date knowledge in their field.
There are many appraisal organizations, but below are the most commonly found in the personal property field:
• (ISA) – International Society of Appraisers
• (AAA) – Appraisers Association of America
• (ASA) – American Society of Appraisers
Among these organizations, there are member credential designations which are based on the appraiser’s education level and training.
Below are the designations for the International Society of Appraisers which Heritage Appraisals is affiliated:
• Member– ISA: Completed the core ISA training in appraisal theory, methodology, ethics and report-writing standards and has documented three or more years of market-related experience.
• Accredited Member– ISA AM: The official designation of a qualified ISA appraiser with a declared specialty and 700 documented hours of appraisal-related experience.
• Certified Member– ISA CAPP: The highest achievement in ISA credentialing and the appraisal industry, signifying appraising expertise, professional development and advanced skills. An ISA CAPP member has 900 documented hours of appraisal reporting and has passed the CAPP examination
